Strong Demand for EIB’s First Benchmark Transaction of 2012

Release date: 06 January 2012 Reference: 2012-002-EN. On Thursday 5th January 2011, the European Investment Bank launched its first benchmark transaction of 2012 with a new 3-year Sterling benchmark maturing in January 2015. The new bond provides a current coupon 3-year presence and fills a gap in the GBP benchmark curve between the September 2014 and July 2015 issues. The issue was priced at a spread of 160bps over the UKT 4.75% due September 2015.

The orderbook was opened on Thursday at 9:00am UK time with a minimum deal size of GBP 300 million and price guidance of UKT 4T 15 +160bps area. The issue saw strong support from the outset, with orders growing to GBP 350 million by 11:00am. The book closed at 12:30pm London time, reaching in excess of GBP 450 million. It allowed EIB to price an upsized deal of GBP 450 million at the final spread of UKT 4T 15 +160bps, in line with original price guidance. The size achieved exceeds that achieved with new GBP fixed rate benchmark lines in 2011.

With 55 investors taking part, the issue attracted very broad interest. The transaction received a strong response from the UK real money community, taking 88% of the deal. In Europe ex-UK, French insurers and Swiss private banks were the most significant investors.

Composition of demand for the issue:

By Geographical Region	By Investor Type
UK - 88%	Fund Managers – 69%
France - 5%	Banks – 21%
Switzerland - 4%	Insurance – 7%
Middle East – 2%	Central Banks / Official Institutions - 2%
Other – 1%	Other – 1%

Eila Kreivi, Director and Head of Capital Markets at the EIB, said: “EIB’s first benchmark transaction of 2012 has been well received.  This sterling issue was in good size - larger than for our new GBP lines in 2011, and well diversified – with a particularly large number of investors participating.”

Adrien de Naurois, Director on Deutsche Bank's SSA Syndicate desk said: "The EIB has again shown great initiative and leadership in responding to investor appetite and identifying the best possible execution window for a new benchmark - quite an accomplishment in these volatile markets."

Lars Humble, Executive Director, SSA Syndicate Manager at Goldman Sachs said: “A great result for EIB’s first new fixed rate benchmark line of 2012. Against an extremely volatile market backdrop, EIB again proved its attraction to a wide range of investors; particularly pleasing was the take up from UK real money accounts, with around 50 separate tickets in the book.”

Kerr Finlayson, Director on HSBC's SSA Syndicate desk said: “A strong start to the year for EIB with their first benchmark of 2012. The decision to issue a new 3-year bond proved to be the right one, as the bulk of demand for AAA assets in the Sterling market has been focused at the front end of the curve so far this year. The orderbook was dominated by UK real money investors, highlighting EIB's status as an investment of choice in difficult times.”

Damien Carde, Managing Director, Head of FBG EMEA at RBS said: "EIB has issued with great success the first GBP supranational transaction of the year, highlighting its ongoing presence and strong understanding of the Sterling market".

For further information please contact:

Richard Teichmeister: +352 4379 86206 / Thomas Schröder: +352 4379 86214

Issue Amount	GBP 450 million
Pricing Date	5th January 2012
Payment Date	12th January 2012
Maturity Date	22nd January 2015
Annual Coupon	2.25% annual
Re-offer Spread	+160bps over UKT 4.75% due September 2015
Listing	Luxembourg Stock Exchange’s Regulated Market
Joint Lead Managers	DB / GSI / HSBC / RBS

Background information:

EIB in the Sterling market

The EIB has been an active participant in the Sterling market since 1977. It established a position as the leading Sterling issuer alongside the UK government, and holds the largest share of the Barclays Sterling non-Gilt Index (currently the EIB has a weighting of 8.6% in the Index). Its provision of a comprehensive and liquid yield curve, reaching out to 2054, is indicative of the Bank’s status and strategic approach. The Bank has a GBP dealer group, designed to develop a pricing policy aimed at providing a high degree of transparency and consistency.

EIB’s GBP (and EUR) are eligible collateral at the Bank of England and EIB GBP bonds are eligible instruments for sterling liquidity buffer purposes following FSA rules for UK banks.

Last year, the EIB was the largest issuer in the (non-asset-backed) Sterling non-Gilt market with a share of over 8%, raising GBP 6.8 billion.

EIB funding strategy and results

The Bank’s funding strategy combines a consistent and transparent approach with flexibility and innovation, both in terms of product and maturity. In 2011 the EIB raised EUR 76 billion. In 2012 the Bank plans to raise EUR 60 billion.

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